In re Michigan Consolidated Gas Co. to Increase Rates
293 Mich. App. 360
| Mich. Ct. App. | 2011Background
- Mich Con sought a rate increase and other relief, including continuation of the uncollectible expense true-up mechanism (UETM) and funding for a Low-Income and Energy Efficiency Fund (LIEEF).
- PSC approved continued UETM with an 80% recovery factor and set base uncollectible expenses at $69.9 million.
- PSC approved $5,069,000 in LIEEF funding to be funded from Mich Con’s ratepayers.
- Appellants ABATE and the Attorney General challenged the UETM basis and the LIEEF funding as beyond statutory authorization.
- Legislative changes after 2000 created and then modified the LIEEF framework, with questions remaining about PSC authority to fund LIEEF via ratepayers.
- Petitioner Mich Con self-implemented a rate increase of about $170 million on January 1, 2010, absent a Commission order to do otherwise.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PSC properly approved the UETM or retroactive ratemaking concerns. | ABATE/AG argue UETM is not statutorily authorized. | PSC and Mich Con contend UETM defers costs to future year and is not retroactive. | Affirmed—UETM approved and deemed permissible. |
| Whether funding of the LIEEF by Mich Con ratepayers is authorized. | LIEEF funding required statutory authorization; legislature did not authorize ratepayer funding. | PSC and Mich Con cited existing fund framework and appropriations. | Reversed—LIEEF funding from Mich Con ratepayers improper; remanded. |
| Whether the PSC erred in permitting LIEEF administration despite changes in enabling statutes. | Statutory framework no longer supports LIEEF under PSC authority. | Legislative history and related provisions indicate some ongoing role for LIEEF. | Remanded for proceedings consistent with opinion on LIEEF and UETM. |
Key Cases Cited
- Mich Bell Tel Co v Pub Serv Comm, 315 Mich 533 (1946) (retroactive ratemaking concerns; limitations on rate adjustments)
- In re Consumers Energy Co Application, 291 Mich App 106 (2010) (accounting convention for deferring expenses; future rates; not retroactive)
- In re Mich Consol Gas Co Application, 281 Mich App 545 (2008) (UETM justification; deferral does not retroactively set rates)
- Consumers Energy, 279 Mich App 180, 279 Mich App 180 (2008) (LIEEF framework; PSC authority limits)
- Attorney General v Pub Serv Comm No 2, 237 Mich App 82 (1999) (statutory interpretation; deference to agency)
- Ford Motor Co v Unemployment Compensation Comm, 316 Mich 468 (1947) (cannot read into statute provisions not enacted)